Standard & Poor, financial-market intelligence analysts, have once again downgraded Spain’s credit rating, this time from AA- down to A. This is the second downgrade by the agency in three months, the fourth since 2009. Spain was not the only country to suffer with Standard & Poor stating that “the oulooks on our long-term ratings on all but two of the 16 euro-zone sovereigns are negative.” Only Germany and Slovakia are “stable”.
One of the reasons for the downgrade was that as the agency believes the various EU summits and meetings have failed to produce “a breakthrough of sufficient size and scope to fully address the eurozone’s financial problems”. The report went on to say that the downgrade “reflects our view that the effectiveness, stability, and predictability of European policymaking and political institutions have not been as strong as we believe are called for by the severity of a broadening and deepening financial crisis in the eurozone.”
In response to the report Spanish prime minister Mariano Rajoy says he knows exactly what Spain needs to improve its economy and it’s credit rating, as well as to create employment.
Rajoy said he intends to go before the European Commission on January 30th to “tell them what I believe needs to be done as a clear response to defend the Euro, control deficits and introduce economic reforms”.
He went on to say that “We are living in difficult times, but the government I preside knows perfectly well what it needs to do to improve Spain’s reputation, stimulate growth and create jobs,” Rajoy said but gave no details of his plan.